You have read numerous warnings from Your Survival Guy about wealth taxes like the one proposed in California. There are all sorts of reasons these are bad policies, but the first is that taxing unrealized wealth is a danger to market stability when owners are forced to sell illiquid holdings to pay taxes on imaginary gains.
The second is that, like most taxes in history, wealth taxes on billionaires will work their way down to the middle class as the pro-tax crowd realizes that even taxing every cent billionaires have won’t pay for their radical ideological spending programs.
The call to lower the threshold for wealth taxes has already begun before any wealth taxes have even been enacted. Radical California Congressman Ro Khanna is already lowering the bar to people with wealth of $50 million or more. That’s no small fortune, but it’s also 20 times less than the advertised “billionaire” tax. Khanna wrote on his Substack
And the tax should not stop at billionaires, it must reach centimillionaires. The tax has to reach all fortunes $50 million and up, and one already does. Every year it has been introduced, I have cosponsored the Ultra-Millionaire Tax Act. It starts at $50 million: 2 percent a year on wealth above that line, And it reaches the money inside irrevocable trusts, taxed to the grantor who set them up. Moving a fortune into a trust should not take it off the books from a wealth tax.
Action Line: It doesn’t take many reductions of that proportion to reach the average middle-class American who is saving for retirement. Wealth taxes won’t be a billionaire problem; they’ll be a problem for everyone by disrupting markets and by gradually creeping lower on the scale of wealth. Click here to subscribe to my free monthly Survive & Thrive letter.
